Recent years have witnessed a fierce Saudi-UAE price war waged over the Emirati dairy market. Most recently, local dairy companies have charged Saudi producers of having breached the bilateral dairy producers' agreement renewed just this May.

According to the Gulf News, local Emirati companies are accusing Saudi firms of re-launching the price war by buying raw milk from small UAE farms at bargain prices. Vehemently denying the charge, the Saudi Al-Marai company said raw milk purchases were a business deal that benefited all parties.

The Saudi–UAE dairy feud surfaced in recent years when local companies accused the Saudis of selling products at prices that severely undercut the UAE market. Attracted by the proximity, affluence and relative size of the market, the three Saudi dairy giants— Al-Marai, Al-Safi-Danone and Nadec— have all established presence in the UAE in recent years.

Upon entering the market, foreign companies are required to sign the UAE Dairy Association agreement, under the auspices of the UAE Ministry of Finance and Industry, which stipulates the agreed prices for fresh milk.

The UAE dairy market is already considered overcrowded by local companies, producing 150 tons of milk, roughly supplying the daily demand for fresh milk in the country. The surplus of 30 tons coming from outside is set to bring further turbulence to the market as competition toughens. — (Mena Rerport)